A local Estonian company is considering tightening of its credit standards. The only product it offers to customers is a local popular drink called "Coca". The sales price per bottle is 4 EUR/unit. All sales are directed to export and are credit sales. Company expects to sell 600,000 bottles next year. The variable costs per bottle are 3 EUR. Current credit period offered to their wholesale customers is on average 60 days and according to company management, this is too long. According to new standards, the company offers 2% discount and VIP service for all the customers that pay their bills in 5 days. It is estimated that 60% of the customers will accept this offer and the rest will have to pay in 40 days. The company forecasts that as a result of the policy change the sales will decrease by 8%. However, the bad debt losses are also expected to decrease from current 3.0% level to 1.5% level of total sales revenue. The company finances its investments into receivables by short-term loans that carry 12% interest rate. Find:

1) Gross profits before and after the policy change 2) The amount invested into receivables before and after the change 3) Change in the financing costs of receivables (using 12% interest rate) 4) Costs related to discounts 5) Change in the bad debt losses

Please show all the calculations. Please do not copy other answers!